November 19, 2008
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers,’ he said, ‘I’m going to reduce the cost of your daily beer by $20.’ Drinks for the ten now cost just $80.
The ten men still wanted to pay their bill the way we pay our taxes.
Read the rest of this entry »
March 5, 2008
So, as of 3/4/08, any live tournament you win in excess of $5,000 will be reported to the IRS by the casino.
The IRS will know just how much a player who won more than $5,000 actually won and will demand the player pay taxes on the winnings of 25 percent. If a player refuses to give the casino his tax information, then the casino must take 28 percent of the winnings for taxes.
IRS also reminds tournament winners that, by law, they must report all of their winnings on their federal income tax returns — regardless of the amount or whether they receive a Form W-2G or other form. IRS notes that this requirement applies for 2007, that it applied for earlier years, and that it will continue to apply even with the new law.
Since you can deduct your ‘gambling loses’ up to your win amounts, you may want to start keeping track of all your receipts (and loses) if you don’t already. Hotels, food, cabs, all count toward gambling expenses.
I hate taxes, and will probably just pay someone in Haiti a few bucks to come up with a new identity. GG me.